Capital Line Funding Group

Capital Line Commerical Glossary of Terms

Acceleration
The right of the mortgagee (lender) to demand the immediate repayment of the mortgage loan balance upon the default of the mortgagor (borrower), or by using the right vested in the Due on Sale Clause

Accrued Interest
The amount of interest that has accumulated since the last loan payment. It is entitled to, but is not due until the payment date.

ACH  Automated Clearing House.
Automatic draw or draft made from a checking/depository account on a specified date each month.

Adjustable Rate Mortgage (ARM)
A mortgage in which the interest rate is adjusted periodically based on an index. Also called a variable rate mortgage

Adjusted Basis
The cost of a property plus the value of any capital expenditures for improvements to the property minus any depreciation taken.

Adjustment Date
The date an interest rate changes on an adjustable rate mortgage (ARM).

Adjustment Interval
For an adjustable rate mortgage, the time between changes in the interest rate charged. The most common adjustment intervals are one, three, five or seven (7) years.

Adjustment Period
The period elapsing between adjustment dates for an Adjustable rate mortgage  (ARM).

Affordability Analysis
An analysis of a buyer’s ability to afford the purchase of a home. Reviews income, liabilities, available funds, and considerers the type of mortgage you plan to obtain, the area  in which you wish to purchase a home, and the closing costs that are likely.

All  inclusive deed of trust
Similar to a ‘wraparound mortgage’.

All-In Rate
The interest rate charged to borrowers on a given loan. The all-in rate includes both the benchmark rate used to set the loan, such as the 10-year Treasury rate, and the spread charged by the lender. So, a 10-year Treasury rate of 3.5percent plus a spread of 200 basis points (or 2 percent) would equal an  all-in rate of 5.5 percent.

Amortization
Literally to “kill off”(from the root word: mort) the outstanding balance
of a loan by making equal payments on a regular schedule (usually monthly). The Payments are structured so that the borrower pays both interest and principal with each equal payment.

Amortization Term
The length of time required to amortize the mortgage loan expressed as a number of months. For example, 360 months is the amortization term for a 30-year fixed rate mortgage.

Annual Cap
A limit on the amount of adjustment in the interest rate on an adjustable rate mortgage over a twelve-month period. Also called cap, payment cap.

Annual Percentage Rate (APR)
The interest rate which reflects the cost of a mortgage as a yearly rate. This rate is usually higher that the stated loan rate for the mortgage, because it in takes into account points and closing costs.

Application Fee
The fee charged by the lender to the borrower for applying for a loan. Payment of this fee does not guarantee that a loan will be approved. Some lenders may apply the cost of the application fee to certain closing costs.

Appraisal
The Determination of property value based on recent sales information of similar properties.

Appraisal Value
An opinion of a property’s fair market value, based on an appraiser’s knowledge, experience, and analysis of the property.

Assessment
A local tax levied against a property for a specific purpose, such as a sewer or street lights.

Assignment
A transfer to another of any property, real or personal, or of any rights or estates in said property.
 
Assumable Loan
These loans may be passed on from a seller of home to the buyer. The buyer “assumes the responsibility of the outstanding loan balance and payments.

Assumption
An assumable mortgage can be transferred from the seller to the new buyer.
Generally requires a credit review of the new borrower and lenders may charge a fee for the assumption. If a mortgage contains a due on sale clause, it may not be assumed by a new buyer.

Assumption Fee
The fee paid to a lender (usually by the purchaser of real property) when an assumption takes place.

Balance Sheet
Financial statement that gives an accounting picture of property owned by a company and of claims against the property on a given date.


Balloon Mortgage
Behaves like a fixed-rate mortgage for a set number of years (usually five or seven) and then must be paid off in full in a single “balloon” payment. Balloon loans are popular with those expecting to sell or refinance his  property within a definite  period of time.

Balloon Note
A loan calling for periodic payments which are insufficient to fully amortize the face amount of the note prior to maturity, so that a principal sum known as  a “balloon” is due at maturity.

Balloon Payment
The final lump sum paid at the maturity date of a balloon mortgage.

Biweekly Payment Mortgage
A plan to reduce the debt every two weeks (instead of the standard monthly payment schedule). The 26 (or possibly 27) biweekly payments are each equal to one half of the monthly payment required if the loan were a standard 30-year fixed rate mortgage. The result for the borrower is a substantial savings in interest.

Blanket Mortgage
A mortgage covering at least two pieces of real estate as security for the same mortgage.

Blended Rate
The average of two loans with different with different rates.

Blended Term
The average of two loans with different terms.

Borrower
(Mortgagor) One who applies for and receives a loan in the form of a mortgage with the intention of repaying the loan in full.

Bridge Loan
A second trust that is collateralized by the borrower’s present home allowing the proceeds to be used to close on a new house before the present home is sold. Also know as a “swing loan”.

Broker
An individual, in the business of assisting in arranging funding or  negotiating contracts for a client but who does not loan the money himself. Brokers usually charge a fee or receive a commission for their services.

Business Plan
A comprehensive planning document which describes a business development objectives and how and where the resources needed to accomplish the objectives will be obtained and utilized.

Business Tax Return
Business tax forms submitted to the Internal Revenue Service to report a company’s annual taxable income.

Buy Down
When the lender and/or the home builder subsidized the mortgage by lowering the interest rated during the first few days of the loan. While the payments are initially low, payments will increase when the subsidy expires.

Buy-Sell Agreement
A legal document between a buyer and seller detailing the specifics for the selling of a business.

California Loan
Commercial /Residential loan for real property located in California.

Caps  (Interest)
Consumer safeguards limiting the amount of change to the interest rate for an adjustable rate mortgage.

Caps (Payment)
Consumer safeguards limiting the amount of change to the monthly payments for an adjustable rate mortgage.

Cash Flow
The amount of cash derived over a certain period of time from an income producing property. The cash flow should be large enough to pay the expenses of the income producing property (mortgage payment, maintenance, utilities, etc.)

Certificate of Eligibility
The document given to qualified veterans which entitles them to VA guaranteed loans for homes, business and mobile homes. Certificates of eligibility may be obtained by sending Form DADA (Separation Paper) to the local VA office with VA Form 1880 (Request for Certificate of Eligibility).

Certificate of Occupancy   (CO)
Document issued by local government agency signifying that a building conforms to local code regulators and is in a condition to be occupied.

Certificate of Reasonable Value (CRV)
An appraisal issued by the Veterans Administration showing the property’s
current market value.

Certificate of Veteran Status
The document given to veterans or reservists who have served  90 days of continuous active duty (including training time). It may be obtained by sending DD 214 to the local VA office with Form 26-8261a (Request for certificate of Veteran Status). This document enables veterans to obtain lower down payments on certain FH/A insured loans.

Change Frequency
The frequency (in months) of payment and/or interest rate changes in an adjustable rate mortgage (ARM).

Closing
The meeting between the buyer, seller and lender or their agents where the property and funds legally change hands, also called settlement. Closing costs usually include an origination fee, discount points, appraisal fee,
title search and insurance, survey, taxes, deed recording fee, credit report charge and other costs assessed at settlement. The cost of closing usually are about 3 percent to 6 percent of the mortgage amount.

Closing Costs
Expenses which are over and above the price of the property that are incurred by the buyers and sellers when transferring ownership of a property. Closing costs normally include an origination fee, property taxes, charges for title insurance and escrow costs, appraisal fees, etc. Closing costs will vary according to the area country where is property is sold and the lender used.

COFI
An adjustable-rate mortgage with a rate that adjust based on a cost-of-funds index, often the 11th District Cost of Funds.

Collateral
Something pledged as security for a debt.

Commercial Bank
A financial institution authorized to provide a variety of financial services. Although commercial banks do make long-term mortgage loans, they have traditionally concentrated on short-term loans and are good sources for construction loans, home improvement loans, and second loans secured by home equity, and home equity lines of credit.

Commercial Paper
A short-term note (normally 30-270 days) issued by corporations with good credit ratings. Rates can be found in financial residential property.

Commercial Real Estate
Property intended for use by retail, wholesale, office, hotel, service users, manufacturing or other industrial purposes-not residential property.

Community Land Trust
A community land trust is a private, non-profit organization whose goal
is  to acquire and hold land for the benefit of the community and to provide secure affordable access to land and housing for community residents.

Commitment Letter
A letter sent to the borrower stating the final terms & conditions of the lease/loan approval.

Condominium
A building or development with individually-owner apartments or houses. The owner has a deed, and possibly a mortgage, on the unit. The owner holds a common or joint ownership in all common areas and facilities that serve the project; land, roofs, hallways, entrance, elevators, etc.

Consolidated Financial Statements
Statements that report the combined operating results, financial position, and cash flows of two or more legally separate but affiliated companies as if there wee one economic entity.

Construction Loan
A short term interim loan to pay for the construction of buildings or homes. These are usually designed to provide periodic disbursements to the builder as he or she progresses

Consumer Reporting Agency (or Bureau)
An organization that handles the preparation of reports used by lenders to determine a potential borrowers credit  history. The agency gets data for these reports from a credit repository and other sources.

Contract Sale or Deed
A contract between purchaser and a seller of real estate to convey title after certain conditions have been met. It is a form of installment sale.

Conventional Loan
A mortgage not insured by FHA or guaranteed by VA.

Conversion Clause
A provision in an ARM allowing the loan to be converted to a fixed-rate at some point during the term. Usually conversion is allowed at the end of the first adjustment period. The conversion feature may cost extra.

Cooperative
A building or development of two or more units in which the right to occupy a unit is obtained by the purchase of stock in the corporation which owns the building. The “owner” owns a share in the corporation, not the actual house or apartment. The “owner” does not have a deed. The “owner” may have taken a loan to purchase the stock, but will not have a mortgage on the unit. The mortgage, if any, covers the entire building or development and is an obligation of the corporation, not the individual “owner”.

Corporation
A fictitious  legal entity/person which as rights and duties independent of the right and duties of real persons and which is legally authorized to act in its own name through duly appointed officers. It is owned by shareholders. Usually created under the authority of state law.

Creative Financing
Any financing arrangement other than a traditional mortgage from a third-party lending institution. Includes loans from the seller, balloon payment loans, wraparound mortgages, assumable mortgages, sale leaseback, land contracts, etc.

Credit Report
A report documenting the credit history and current status of a borrower’s
credit standing.

Credit Risk Score
A credit risk score is a statistical summary of the information contained in a consumer’s credit report. The most well know type of credit risk score is the Fair Isaac or FICO score. This form of credit scoring is a mathematical summary calculation that assigns numerical values to various pieces of information in the credit report. The overall credit risk score is highly relative in the credit underwriting process for a mortgage loan.

Credit Worthiness
A measure of an individual’s or company’s past and future ability and willingness to repay debts.

Cushion
An amount of money, occasionally required by a lender, which is set aside to protect said lender against increases in expenses.

Debt
An obligation to pay.

Debt Consolidation
A combining of debt from different financial institutions or products into one loan.

Debt Service Coverage
Cash required in a given period for payment of interest and current principal.

Debt-to-Income Ratio  (DSCR)
DSCR is an underwriting formula that measures whether an income-producing property can sustain its debt based on cash flow. The calculation is Net Operating Income/Total Debt Service. For lenders, the higher the DSCR, the less risk it is taking on the loan. Freddie Mac and Fannie Mae lenders typically underwrite to a 1:20DSCT, meaning that for every dollar spend on debt payments, the3 property generates $1.20

Deed of Trust
A legal document which affects the transfer of ownership of real estate from the seller to the buyer. In many states, this document is used in place of a mortgage to secure the payment of a note.

Default
Failure to meet the legal obligations in a contract, specifically, failure to make the monthly payments on a mortgage.

Deferred Interest
When a mortgage is written with a monthly payment that is less than required to satisfy the note rate, the unpaid interest is deferred by adding it to the loan balance. See Negative Amortization.

Demand Feature
A provision allowing for the financial institution to demand the balance to be paid-in-full within a specific period due to the default of the contract.

Deferred Payments
Payments to be made at some future date. See ‘graduated payment mortgage’.

Delayed Exchange
Same or similar to “tax-free” exchange.

Demand Loan
A loan having no specific date for repayment but may be called by the lender at any time.

Demographics
Macro-economic information around a business, population, income, major traffic generators, etc.

Department of Veterans Affairs  (VA)
An independent agency of the federal government which guarantees long term, low-or-no-down payment mortgages to eligible veterans.

Developer
One who prepares raw land for construction and sells lots to a builder. In some cases the developer retains the title.

Discount Point (Point)
Prepaid interest assessed at closing by the lender.  Each point is equal to 1 percent of the loan amount (e.g., 1 point on a $100,000 mortgage would cost $1,000 )

Documentation Fee
A fee charged to a borrower for documentation  and various filling fees.
The fee may be either flat fee or a percentage.

Documentation Specialist
Individual who coordinates the documentation and funding of a  lease or loan.

Earnest Money
Money given by a buyer to a seller as part of the purchase price to bind a transaction or assure payment.

EBITDA
Earnings before interest, taxes, depreciation and amortization. EBITDA is a measure of the cash flow available to make debt payments.

Economic Demand Generator
Sources of business income, primarily from customers.

Economic development area
An area defined by local authorities for government-assisted economic programs.

End Loan
Same or similar to “construction loan”.

Entitlement
The VA home loan benefit is called an entitlement (i.e. entitlement for a VA guaranteed home loan). This is also known as eligibility.

Environmental Indemnity
Protection against loss and liability as a result of litigation or other proceedings related to damage to air, water, wildlife and other natural surroundings.

Environmental Site Assessment
Planning document that assesses the environmental impact created by a proposed business.

Equal Credit Opportunity Act  (ECOA)
A federal law that requires lenders and other creditors to make credit equally available without discrimination based upon race, color, religion, national origin, age, sex, marital status or receipt of income from public assistance programs.

Equipment
New or used personal property.

Equity
The market value of real property, less the amount of existing liens. Equity build-up is the reduction of principal on a mortgage or deed of trust by periodic payments, which increases (builds up) the difference between the property value and amount of the lien.

Equity Loan
Same or similar to “home equity line of credit”

Escrow Account
Account held by a lender for payment of taxes, insurance, or other periodic debts against real property. The property owner pays a portion of the yearly taxes, insurance, etc., with each monthly payment. The lender pays the tax bill from accumulated funds. Also called, “impound or trust account.”

Fee Simple Ownership
Absolute Legal Ownership

Furniture, Fixtures & Equipment  (FF &E)
Fixtures comprise personal property attached to real estate property so that it cannot be removed without damage. Furniture & Equipment is not so attached, and can be moved.

Financial Statements  (F/S)
Consists of two parts, a balance sheet and \profit & loss (P&L, or income) statement.

Down Payment
Money paid to make up the difference between the purchase price and the mortgage amount.

Due-on-Sale Clause
A provision in a mortgage or deed of trust which allows the lender to demand immediate payment of the balance of the mortgage if the mortgage holder sells the home.

Equity
The difference between the fair market value and current indebtedness, also referred to as the owner’s interest. The value an owner has in real estate over and above the obligation against the property.

Escrow
An account held by the lender into which the home buyer pays money for tax or insurance payments. Also, earnest deposits held pending loan closing.

Escrow Disbursements
The use of escrow funds to pay real estate taxes, hazard insurance, mortgage insurance, and other property expenses as they become due.

Escrow Payment
The part of a mortgagor’s monthly payment that is held by the servicer  to pay for taxes, hazard insurance, mortgage insurance, lease payments, and other items as they become due.

Fair Market Value
Price at which an asset or service is sold by the seller to buyer, assuming both have reasonable knowledge of relevant market facts.

Fannie Mae
Federal National Mortgage Association

Farmers home Administration   (FmHA)
Provides financing to farmers and other qualified borrowers who are unable to obtain loans elsewhere.

Federal Home Loan Bank Board (FHLBB)
The former name for the regulatory and supervisory agency for federally chartered savings institutions. The agency is now called the office of Thrift Supervision.

Federal Home Loan Mortgage Corporation   (FHLMC)
Also known as Freddie Mac.  A government sponsored entity that purchases conventional mortgages from insured depository institutions
And HUD–approved mortgage bankers.

Federal Housing Administration (FHA)
A division of the Department of Housing and Urban Development. Its main activity is the insuring of residential mortgage loans made by private lenders. FHA also sets standards for underwriting mortgages.

Federal National Mortgage Association   (FNMA)
A government sponsored entity that purchases and sells conventional residential mortgages as well as those insured by FHA or guaranteed by VA.

Fee Simple Ownership
Absolute Legal Ownership

FHA Loan
A loan insured by the Federal Housing Administration open to all qualified home purchasers. While there are limits to the size of FHA loans, these loans are generous enough to handle moderately priced homes almost anywhere in the country.

FHA Mortgage Insurance
Requires a fee (up to 2.25 percent of the loan amount) paid at closing to insure the loan with FHA. In addition, FHA mortgage insurance requires an annual fee of up to 0.5 percent of the current loan amount, paid in monthly installments. The lower the down payment, the more years the fee must be paid.

FHLMC
The Federal Home Loan Mortgage Corporation provides a secondary market for savings and loans by purchasing their conventional loans. Also know as “Freddie Mac”.
Finance Charge
The total dollar amount your loan will cost you. It includes all interest payment for the life of the loan, any interest paid at closing, your origination fee and any other charges paid to the lender and/or broker. Appraisal, credit report and title search fees are not included in the finance charge calculation.

Firm Commitment
A promise by FHA to insure a mortgage loan for a specified property and borrower. A promise from a lender to make a mortgage loan.

First Mortgage
The Primary Lien against a property.

Fixed Installment
The monthly payment due on a mortgage loan including payment of
both principal and interest.

Fixed Rate Mortgage
The mortgage interest rate will remain the same on these mortgages throughout the term of the mortgage for the original borrower.

Fixed Term Arms. Initial Fixed Interest rate and payment rate for 3, 5 ,7,or 10 years with Fully Amortized or Interest Only payments.

Florida Million Mortgage Loan
$3.0MM to $45 Million Mortgage loan programs have been very popular with luxury home owners in Florida.
Float
Between the time of application and closing, a borrower may choose to bet on interest rates decreasing by electing to float. Floating is essentially choosing not to lock the interest rate. Since it is the borrowers responsibility to lock his or her rate before (or at) closing, choosing to float is consider risky and may result in a higher interest rate. Request information from your lender regarding lock procedures.

Foreclosure
A legal procedure in which real estate is sold by the lender to pay a defaulting borrower’s debt.

Fully Amortized ARM

FNMA
The Federal National Mortgage Association is a secondary mortgage institution. FNMA buys VA, FHA and conventional mortgages from primary lenders. Known as “Fannie Mae”.

Foreclosure
A legal process in which the lender or the seller forces a sale of a mortgaged property because the borrower has not met the terms of the mortgage. May also be known as repossession of property.

Freddie Mac
Federal Home Loan Mortgage Corporation

Ginnie Mae
Government National Mortgage Association (GNMA)

Good Faith Estimate
An estimate of charges which a borrower is likely to incur in connection with a loan closing.
Government National Mortgage Association  (GNMA)
Also known as “Ginnie Mae”. Provides sources of funds for residential mortgages, insured or guaranteed by FHA or VA

Graduated payment Mortgage  (GPM)
A type of flexible payment mortgage where the payments increased for a specified period of time and then level off. This type of mortgage has negative amortization built into it.

Gross Monthly Income
The total amount the borrower earns per month, not counting taxes
or expenses. The Gross Monthly is often used in calculations.

Ground Lease
A lease of vacant land or land exclusive of any building on it. Usually a net lease

Growing Equity Mortgage   (GEM)
A fixed rate mortgage that provides scheduled payment increases  over an established period of timed. The increased amount of the monthly payment is applied directly toward reducing the remaining balance of the mortgage.

Guaranty
A promise by one party to pay a debt or perform an obligation contracted by another if the original party fails to pay or perform according to a contract.

Guarantee Mortgage
A mortgage that is guaranteed by a third  party.

Hazard Insurance
A form of insurance in which the insurance company protects the insured from specified losses, such as ire, windstorm and the like.

Hawaii Million Mortgage Loan
Hawaii is a very popular investment destination for borrowers who are seeking $$MM to $50 Million Mortgage Loan Programs

Historical Financial Statement
Balance sheets and income statements showing the operations of the business for a period of years,

Housing Expenses-to-Income Ratio
The ratio, expressed as a percentage, which results when a borrower’s housing expenses are divided by his/her gross monthly income

HUD-I Statement
A document that provides an itemized listing of the funds that are payable at closing. Items that appear on the statement include real estate commissions, loan fees, points and initial escrow amounts. Each item on the statement is represented by a separate number within a standardized numbering system. The totals at the3 bottom of the HUD-I statement define the sellers’s net proceeds and the buyer’s net payment at closing.

Idaho Million Dollar Mortgage
Commercial or residential loan on real property with the state of Idaho.

Impound Account
Same or similar to “escrow account”.

Improvements
Enhancements made to land or build with the intent to increase the visual appeal and value of the property.

Index
A published interest rate controlled by the lender to which the interst rate on an adjustable Rate Mortgage (ARM) is used. The index and the interest rate linked to it may increase or decrease. The typical index values available are as follows:

1YTB One Year Treasury Bill Yield
3YTB  Three Year Treasury Note Yield
5YTB  Five Year Treasury Note Yield
10YTB Ten year Treasure Bond Yield
30YTB Thirty Year Treasury Bond Yield
6mTB Six month Treasury Bill Yield
6mCD Six Month CD Rate
6mLIB Six  Month Libor
1 LIB One Year Libor
11 Di       11th District Cost of Funds Rate
Prime  Prime Interest Rate
                       
Indexed Rate
A statistic that indicates some current economic or financial condition. The term, payment, interest rate, or principal amount of a long-term loan may be adjusted periodically according to a specific index. The index and the manner of adjustment are generally stated in the loan contract.

Insured Mortgage
A mortgage that is protected by the Federal Housing Administration
(FHA) or by private mortgage insurance (PMI)

Interest
Money charged for the use of  money (principal).

Interest Accrual Rate
The percentage rate at which interest accrues on the mortgage. In
most cases, it is also the rate used to calculate the monthly payments.

Interest Only Mortgages Programs are available from 1 month Adjustables to 7/1 Adjustables to 30 year fixed rate mortgages with initial interest only payments. It is most important to craft the program to the needs of the client.

Interest Rate Buy Down  Plan

An arrangement that allows the property seller to deposit money to an
account. That money is then released each month to reduce the mortgagor’s monthly payments during the early years of a mortgage.

Interest Rate Ceiling

For an adjustable rate mortgage (ARM), the maximum interest rate, as specified in the mortgage note.
Interest Rate Floor
Interim Financing
Investor

Jumbo Loans  A loan above $417,000 on a single family residence, for most of the country. These limits are set by the Federal Home Loan Mortgage Corporation , and the Federal National Mortgage Association.. Because jumbo loans cannot be funded by these two agencies, they usually carry a higher interest rate.


Landlord Subordination   (Waiver)
A document signed by a landlord which waives the landlords’s rights to collateral or leased equipment.

Late Fee
A fee charged when a payment is not received on the payment due date. Usually a flat fee but also may be a percentage.

Lease Agreement
A document entered into between a landlord (lessor) and a tenant (lessee) giving the exclusive right to use the property or equipment for a specified period of time in return for periodic payments.

LIBOR (London Interbank Offered Rate)
Rate the most credit worthy international banks dealing in Eurodollars charge each other for loans.


Life of Loan Cap
The maximum interest rate that can be charged during the life of the loan. Also called Life Time Cap. This value is often expressed as an increment above the initial loan rate.

Limited Liability Company (LLC)
A limited liability company is a business structure best described as a hybrid between a partnership and a corporation-a “pass through” of all profits and losses to the owners without taxation  of the entity itself, as in a partnership, and a shield from personal liability, as in a corporation.
Limited Partnership
A partnership where only general partners may run the business, while limited partners cannot perform any management functions. However, limited partners may contribute capital, share in the profits, and are limited from liability. All limited partnerships must have at least one general partner, who remains personally liable for all debts and liabilities of the partnership, and any number of limited partners.

Line-Of-Credit  (LOC)
A loan that may be borrowed against and paid down during its term. These loans usually have a covenant/special condition attached stating that the loan must have a zero balance for a specified period of time.
Loan Closing
Date on which loan funds are actually disbursed.

Loan –To-Value Ratio
An underwriting calculation  that measures the amount of the loan against the property’s appraised value. A borrower seeking $1million loan for a property worth $ 2 million will have an LTV of 50 percent, for instance.

MAI Appraisal
An appraisal prepared by a general appraiser certified by the Appraisal Institute.

Market Analysis Data
Demographic data about the local market environment.

Mega Super Jumbo Loans
These are loans of $3 Million to $40 - $50 Million. Equity , Collateral, one’s
Ability to repay the mortgage as well as one’s credit history are important.

Mezzanine Financing
A form of capital that fills the gap between a first mortgage and equity and equity to achieve 100 percent financing on a deal. Mezzanine financing can be structured to emphasize debt or equity characteristics-it can work like a standard loan or allow the mezzanine provider to share in profits.

Mortgage
$1 Million Mortgage Loan to $40 million dollar loans programs are referred to in the lending industry by the terms Super Jumbo Mortgage  or even “Mega Jumbo Loan.

Net Cash Flow
An accounting presentation showing how much of the cash generated by the business remains after expenses-including interest-and principal repayment on financing are repaid.

New Mexico Million Dollar Mortgage
Commercial or residential loans on real property within the state of New Mexico

No Income No Asset Program (NINA)  These loans have No Verification of Income, or Assets and are available on 6 mo. adjustable,  on  2,. 3., 5  & 7 years fixed ARM’s. To qualify one need spotless credit.

No Income, No Asset, No Employment (No Doc)
These loans have No Verification of Employment Income or Assets.
Loan instruments can be ARM’s or Fixed Rate. No-Doc Loans have been popular for self-employed borrowers. Today most no-doc programs stipulate
one must be a wage-earner to qualify

Non-Recourse Debt
A type of debt wherein the borrower does not have personal liability for the loan. Non-Recourse debt is secured by collateral, usually in the form of property. If the borrower defaults, the lender can seize the property.

Orderly Liquidation Value
Value that equipment would yield at an arms length auction or liquidation sale.

Option Arms  Allows one to choose the payment that one wishes to make each month, from a minimum amount to a fully amortized payment.

Owner Occupied
Property occupied by the borrower.

Partners
Individuals in a legal relationship for the purpose of conducting a business enterprise.

Partnership
A partnership is one of two categories: general and limited.

Payment Schedule
Timetable of payments.

Perfected First Security Interest
Status ascribed to security interests after certain events, such as fillings and taking possession of collateral, have occurred where under there are no other liens or encumbrances prior in right.

Personal Guaranty
A pledge made by the operator or owner of a business which obligates the operator owner to personally repay some or all fall of the debt of a business should the business default on its payment obligations.
Pledged Asset Mortgage-Borrow 100% of the purchase price or of one’s home value without mortgage insurance up to $10 million, may be higher
on case by case basis.

Prepayment Penalty
A fee charged for early payment of a transaction balance as compensation for income lost as a result of such prepayment.

Pro forma Financial Statement
A business owner’s forward looking outlook on a company’s operations.

Projections
A forward looking view of a company’s operations.


Proposal
The initial paperwork sent to the borrower from the Account Executive spelling out the structure of the transaction, terms and corrections.

Real Property
Land and what is erected, growing or affixed on it. Also, minerals and waters beneath the surface of the soil.


Residential Mortgage
Mortgage of a residential property. Mortgage up to $1 million is federal and state tax deductible (or up to $100,000) for a home-equity loan)

Resume
A brief summary of an individual’s work history, including name, address, contact information, as well as an outline of work experience.

Reverse Mortgage
A financial tool designed by the Federal Government as a form of financial relief of home homeowners 62 and older. It allows seniors to stay in their home and use their home’s equity as tax-free income or to eliminate their current Mortgage payment w/out paying any additional money every month

Sole Proprietor
A business that is owned by one person. All income and losses generated by the business are treated as personal and will be filed along with the proprietor’s regular tax returns.

Special Conditions
Formal conditions or clauses written into a transaction agreement.

Spread
Difference between cost of funds and lending rate.

Start Date
The activation date of the contract.

Survey
Measurement of the boundaries of a parcel of land, its area and sometimes its topography.

Tenant
A holder of property under a lease or other rental agreement.

Term Loan
A loan that must be repaid within a specific time frame.

Terminal Rental Adjustment Lease  (TRAC Lease)
A tax-oriented lease of motor vehicles or trailers that contains a clause for rent adjustment at the end of the lease.

Third Party Soft Costs
Various costs incurred during the construction phase of a project. However, not associated with the physical construction of the project such as surveys or site plans.

Title
Evidence of right to possession of land.

Title Policy
Insurance against loss resulting from defects in title to a specifically described parcel of real property.

Treasuries
Debt instruct issued by the U.S. Department of the Treasury.

True Lease
A tax-oriented lease which complies with all IRS guidelines for a true lease.

Turnkey Financing
Financing for the sale of a business which is structured so that the new owner need only ‘turn the key’ in order to commence business.

Super Jumbo Mortgages The term Super Jumbo Mortgage is used to describe mortgage loans exceeding $650,000.

Texas Million Dollar Mortgage
Commercial or residential loans on real property within the state of Texas.

Underwriting
The action of a credit analyst looking at the information submitted by a borrower and making a credit decision.

Uniform Commercial Code   (UCC)
 A code (laws) which regulates commercial transactions. This code replaced the various state statutes covering chattel mortgages, conditional sales, trust receipts, etc.

Utah Million Dollar Mortgage

VA Loans
May be used to buy a home, build a home and even improve a home with energy-saving features such as solar or heating/cooling/windows/doors or other energy efficient improvements approved by the Lender and VA.

Variable Rate
A transaction with an interest rate that may fluctuate. There is often tied to an index that reflects changes in market rates of interest. A fluctuation in the rate causes changes in the payment amount. Limits (cap rate) are placed on the degree to which the interest rate can increase.

Warranty Deed
A deed that warrants that the grantor has title as claimed. It purports to convey property free and clear of all encumbrances, except those noted

Working Capital
Cash available for daily business operations. Current Assets-current liabilities = working capital

Washington Million Dollar Mortgage
Commercial or residential loans on real property within the state of  Washington.